Govt plans to borrow Rs1.5tr from banks
The government intends to borrow over Rs1.5 trillion between August and October, and most of the money would be borrowed through banking system.
The State Bank issued the auction calendar of Pakistan Investment Bonds (PIBs) and Market Treasury Bills on Tuesday.
An amount of Rs1.425tr will be borrowed through Tbills auction. In addition to Rs1.207tr maturity amount of the T- bills, the government plans to borrow Rs217 billion from PIBs.
The government has reduced reliance on PIBs and now T-bills are being used for borrowing.
The shift occurred during the last three months since growth in domestic debt servicing increased by 13.3pc mainly because of high-yield PIBs. The recent fall in interest rates reduced the return on PIBs, thus these bonds were no more attractive for banks. The coupon rate on three-year PIBs was cut to 8.75pc.